The Obamacare Enrollment Crash Is Coming

By Sam Baker

February 20, 2014

Obamacare's enrollment numbers are surging—for now.

After a disastrous launch, the law's backers are breathing a sigh of relief as enrollees flock to its insurance exchanges. But the totals are built on a shaky foundation, and at some point soon, the exchange enrollment figures are going to fall, perhaps by more than 1 million people.

Right now, the administration is counting the total number of people who have selected an insurance policy under the law, rather than the number of people who've paid for it.

But at some point, likely this spring, the administration will be forced to disclose how many people are actually paying their premiums—a more accurate, yet undoubtedly lower count of who actually got insured under the Affordable Care Act.

About 20 to 30 percent of people who selected a plan did not make their first payment, according to anecdotal estimates from individual insurance companies. Those numbers aren't official or final, and could improve—but however they end up, that's the real measure of Obamacare's first-year success.

It's hard to see the revision doing any real damage to the law's long-term prospects for survival, or its potential to grow. And in real-world impact, it doesn't mean that anyone has lost their insurance; it simply means they signed up to buy a plan that, for whatever reason, they're not going to actually buy.

Politically, however, it will be a Republican field day, as it hands Republicans a fresh attack—one that undercuts Democrats' emerging success story of high enrollment—and could put vulnerable Democrats back on the defensive over a law they're trying not to talk about.

The Health and Human Services Department's latest update reported that 3.3 million people had selected an insurance policy on the law's new exchanges by the end of January. It was a positive report by almost any standard, and puts enrollment on track to hit 5 to 6 million by the time the window closes in March.

Democrats have touted the totals as a sign that the law is working, despite Republican intransigence and early technology disasters.

But if the early indications hold and the more accurate enrollment metric shaves 20 to 30 percent off the initial numbers, it will be a painful shift for Democrats. At current levels, it takes enrollment from 3.3 million down to about 2.6 million. If, hypothetically, 6 million people choose a plan by the end of March, real enrollment would be closer to 4.8 million.

That's enough for the new insurance markets to be sustainable, health care wonks say. The Affordable Care Act is already here to stay.

Still, the day the White House cuts its own enrollment totals by 20 percent is probably not going to be a very fun day for vulnerable Democrats, who are already frustrated with the administration over the delays and technical headaches that have riddled the implementation effort.

Republicans are trying to keep the debate focused on Obamacare, and to paint the law as not living up to expectations. And a downward revision in enrollment—even one done in the name of more accurate data—will put the law further away from the initial target of enrolling 7 million people this year.

But there's no way around it for Democrats. Party strategists say the White House has to release the more accurate figures once it has them, and that the best strategy for vulnerable senators is simply to ride out another GOP attack.

"The White House has got to be as transparent as possible from here on out. The last thing they can afford to do is get tripped up," said Jim Manley, a Democratic strategist and former aide to Senate Majority Leader Harry Reid.

Democrats don't expect the enrollment revision to do long-term political damage. Signing up 4.8 million people instead of 6 million people is still signing up 4.8 million people, they argue.

"Overall, I know there is a constant search for less than good news in the HealthCare.gov arena, but if you look at the data reported, it is overwhelmingly positive, and the predictions of failure and doom and gloom that we saw—understandably, perhaps, given how rocky the start was in October and November—have all come to naught," White House press secretary Jay Carney said last week when asked about people who had not paid their premiums.

There probably wasn't any way for Democrats to avoid the box they're in now.

Even before the HealthCare.gov launch made signing up almost impossible, the Centers for Medicare and Medicaid Services had always planned to define enrollment based on the number of people who selected a plan, a CMS official said. The official said CMS knew there would be a lag in getting more-comprehensive data from insurance companies.

That lag time, though, has grown longer as a result of HealthCare.gov's technical problems.

CMS is still building the computer system that automatically pays insurers and reconciles enrollment information between carriers and the government. It's one of the back-end systems that took a back seat as HHS struggled to repair the HealthCare.gov user experience.

Although insurers are getting paid through a workaround system, it only captures consumers who get a tax subsidy to help pay for their coverage—so it's not a comprehensive accounting of every enrollee.

A full count of actual enrollment will be available when that system is finished, the White House has said.